News Briefs

Rule modifies bias complaint process

A final rule modifying the complaint process for federal employees claiming discrimination has been issued by the Equal Employment Opportunity Commission.

The new rule allows an EEOC complaint challenging a proposal or a preliminary step to a personnel action to be dismissed, unless the federal employee alleges that the proposal is retaliatory.

The rule also requires federal employers to provide a written explanation when an investigation of a complaint of discrimination is not completed in a timely manner. In addition to explaining why the investigation is not complete, the federal agency’s letter must provide the employee with an estimated date of completion and, more importantly, provide notice of the employee’s right to request a hearing or file a lawsuit.

The rule requires federal agencies to file appeals and complaints with the EEOC in a digital format, unless good cause can be shown for submissions in other formats.

On the other hand, federal employees who file complaints are merely encouraged to submit digital filings.

In addition, the changes authorize the EEOC to issue notices to non-compliant federal agencies and permit the creation of pilot projects for complaint processing.

The new rule treats an administrative judge’s decision on the merits of a class complaint as a final decision that an agency can implement or appeal. Previously, an administrative judge’s decision in that regard had the status of a recommendation.

According to the EEOC, the changes represent the first major revision to the federal sector complaint process since 1999. The new rules go into effect Sept. 24.

— Pat Murphy

DOL issues final whistleblower regs

The Department of Labor has issued final regulations implementing the whistleblower protections of the Consumer Product Safety Improvement Act.

The act includes a provision protecting employees who report violations of federal product safety laws. The new rules, which became effective July 10, establish procedures for the handling of whistleblower complaints under the act.

Section 1983.102(a) of the final rules provides that no “manufacturer, private labeler, distributor, or retailer” may “discharge or otherwise retaliate” against an employee who engages in certain protected activities. The most notable protected activity under the rules is reporting a violation of the Consumer Product Safety Act to the employer, the federal government or a state attorney general.

Under the final rules, employees who experience retaliation in violation of the Consumer Product Safety Improvement Act have 180 days to file a complaint with the local Occupational Safety and Health Administration office. Pursuant to §1983.105(a), the agency has 60 days to investigate a complaint and issue written findings. If the agency finds “reasonable cause” to believe that the complaint has merit, the agency has the authority to order “appropriate relief,” including preliminary reinstatement, back pay and compensatory damages.

Either party can file objections and have the matter decided by an administrative law judge. Section 1983.107(d) makes clear that the formal rules of evidence do not apply in administrative hearings.

Notably, the rules spell out the avenues for judicial relief. Section 1983.114 generally allows an employee to bring an “action at law or equity for de novo review” in U.S. District Court “without regard to the amount in controversy.” A federal lawsuit generally must be filed within 90 days of the receipt of OSHA’s written findings.

Section 1983.112 provides judicial review by the federal appellate courts of decisions rendered by administrative law judges and the DOL’s Administrative Review Board.

Section 1983.113 provides for the judicial enforcement of preliminary orders of reinstatement and final orders. For violations of such orders, the rule authorizes remedies in the form of reinstatement with the preservation of seniority status, back pay with interest, and special damages, including litigation costs, expert witness fees and “reasonable” attorneys’ fees.

The DOL finalized the rules after publishing interim rules and inviting public comment in August 2010.

— Pat Murphy

Measure protects social media use

Employers would be unable to “compel or coerce” employees into providing access to their social media accounts under proposed federal legislation.

Rep. Peter Welch, D-Vt., co-sponsored the Password Protection Act of 2012, H.R. 5684, which would apply to social networking sites such as Facebook and Twitter.

“Employees have a legitimate expectation of privacy when using Facebook or Twitter,” Welch said in a statement. “This legislation will prevent fishing expeditions into employees’ private lives. While an employer may have a valid concern about the business impact of an employee’s online activity, demanding passwords and unfettered access to private accounts is an over-the-top solution.”

After news reports that employers were requiring prospective and current employees to provide access to their usernames and passwords for social media sites, several states introduced similar bills.

States such as California, Illinois and Michigan are considering legislation, while Maryland became the first state to pass a law banning employers from asking employees or prospective employees for passwords to their private social media accounts.

— Correy E. Stephenson

FDA safety billsigned into law

Legislation that revamps the process by which the Food and Drug Administration evaluates, approves and monitors some drugs and medical devices has been signed into law by President Barack Obama.

The FDA Safety and Innovation Act, which reauthorizes the FDA user fee program, also boosts the agency’s oversight authority of the pharmaceutical industry to ensure that prescription and over-the-counter drugs are both safe and effective regardless of their country of origin.

The measure also expedites the approval process for some drugs and treatments to promote safety and efficacy while allowing breakthrough treatments to make their way to the market faster.

The law allows the FDA to use outside inspectors to monitor manufacturing facilities, and requires the agency to provide an explanation for denying approval for some low-risk medical devices within 30 days.

“This new law makes much-needed changes to outdated regulations and allows the FDA to focus on the safety and quality of drugs and therapies,” said Sen. Michael F. Bennet, D-Colo., who worked with lawmakers on several provisions of the law, in a statement.

“The more efficient regulatory structure will spur innovation allowing bioscience companies and entrepreneurs [to] more quickly advance lifesaving breakthrough drugs and medical devices to patients faster while maintaining a commitment to safety. “

— Kimberly Atkins

Pilot offers flexibility in arbitration cases

A new pilot program launched by the nation’s largest independent securities regulator will allows parties in arbitration involving claims for $10 million or more to customize the administrative process and bypass certain rules.

The Financial Industry Regulatory Authority initiative will give participating parties more control over arbitrator selection including the use of non-FINRA arbitrators, and allow more flexible procedures for exchanging information prior to the hearing and expanded discovery options such as depositions and interrogatories. The initiative will also offer parties a wider selection of facilities.

“In response to the increasing number of very large cases, we wanted to introduce a more formal approach to give parties greater flexibility and more control over the administration of their case,” said Linda Fienberg, president of FINRA Dispute Resolution, in a statement.

FINRA will send letters to parties in arbitration cases involving claims of $10 million or more notifying them of their eligibility.

Participation in the program is voluntary, but parties must pay all additional program costs and be represented by counsel to be eligible.

— Kimberly Atkins

DOL: potential cuts don’t trigger WARN

Federal contractors are not required to give notice to employees about potential staffing cuts that may result if automatic federal spending cuts are triggered at year’s end, the Department of Labor has announced.

In a July 30 guidance letter, Jane Oates, DOL assistant secretary, instructed state DOL offices that federal contractors are not required to give Worker Adjustment and Retraining Notification — or WARN — Act notices 60 days in advance of Jan. 2, 2013, the day automatic budget cuts, also known as a sequester, are scheduled to take place if Congress does not reach an agreement on a 10-year budget plan.

Normally, the WARN Act requires employers with at least 100 employees to provide written notice to workers at least 60 days before a plant closing or mass layoff.

However, due to the uncertain nature of the potential federal cuts, the statute does not apply to federal contractors who may be affected, Oates said.

“[I]n the context of prospective across-the-board budget cuts … WARN Act notice to employees of federal contractors, including in the defense industry, is not required 60 days in advance of Jan. 2, 2013, and would be inappropriate, given the lack of certainty about how the budget cuts will be implemented and the possibility that the sequester will be avoided before January,” Oates wrote in the guidance letter.

— Kimberly Atkins

NLRB mulls tax issue on back pay

The National Labor Relations Board will decide whether, in awarding lump sum back pay, employers found to have committed unfair labor practices should be required to pay for any excess federal and state income taxes owed.

The board will also decide whether such an employer must submit documentation to the Social Security Administration so that back pay is allocated to the appropriate calendar quarters.

The board invited briefs on those issues from all interested parties in its July 31 decision in Latino Express, which found that the company violated the National Labor Relations Act by discharging two employees for supporting workers’ efforts to unionize and otherwise infringing on employees’ rights under the act, and awarded a lump sum back pay award.

Briefs on the tax liability question may be filed electronically by Oct. 1 on the board’s website.

— Kimberly Atkins

Company to pay $55K;fired obese employee

BAE Systems Tactical Vehicle Systems will pay $55,000 to settle a disability discrimination lawsuit filed by the Equal Employment Opportunity Commission, the agency has announced.

The EEOC’s suit alleged that BAE fired Ronald Kratz II because he was morbidly obese and that the company regarded him as disabled. At the time of his discharge, Kratz was qualified to perform the essential job functions of his material handler position, the agency said. The EEOC also said the company did not engage in any discussion with Kratz to determine whether reasonable accommodations were possible that would have allowed him to continue to perform his duties.

The EEOC filed the suit in U.S. District Court in Texas after first attempting to settle the case through its conciliation process.

The consent decree settling the suit requires the company to pay $55,000 in monetary relief to Kratz and provides him with six months of outplacement services.

Additionally, the decree requires training for the company’s managers and human resources professionals on equal employment opportunity compliance, disability discrimination law, and responsibilities regarding reasonable accommodation to employees and applicants. The company must also post an anti-discrimination notice.

— Tony Ogden

Glaxo settles fraudcharges for $3 billion

GlaxoSmithKline has agreed to plead guilty and pay $3 billion to resolve charges that the pharmaceutical giant fraudulently marketed the prescription drugs Paxil, Wellbutrin and Avandia, the U.S. Department of Justice has announced.

The deal, which addresses federal criminal charges as well as civil claims brought by the states, is the largest health care fraud settlement in U.S. history, the department said in a press release.

“Today’s multi-billion-dollar settlement is unprecedented in both size and scope,” said Deputy Attorney General James M. Cole in a July 2 press conference in Washington. “It underscores this administration’s firm commitment to protecting the American people and holding accountable those who commit health care fraud.”

According to the government, Glaxo has agreed to plead guilty to three criminal charges. The first two counts charged Glaxo with introducing misbranded drugs — the antidepressants Paxil and Wellbutrin — into interstate commerce. The third count is for failing to report safety data about the diabetes drug Avandia to the Food and Drug Administration.

Under the terms of the plea agreement, Glaxo will pay a criminal fine of $957 million and forfeit $43 million. The drug company also will pay $2 billion to resolve federal and state civil claims. The federal government sought compensation under the False Claims Act, and various states have pursued similar claims against the drug giant.

The settlement resolves pricing fraud allegations relating to Paxil, Wellbutrin, Avandia and other drugs, the government said. The corporation also agreed to be monitored by federal officials for five years to ensure the company’s compliance with both the terms of the settlement and federal drug regulations.

Prosecutors said Glaxo illegally promoted the drug Paxil for treating depression in children from April 1998 to August 2003, despite the fact that the FDA never approved it for anyone under age 18. The corporation also promoted Wellbutrin from January 1999 to December 2003 for weight loss, the treatment of sexual dysfunction, substance addictions and attention deficit hyperactivity disorder, even though it was approved only for treatment of major depressive disorder, the government said.

DOJ officials also said that, between 2001 and 2007, Glaxo failed to report to the FDA safety data regarding the diabetes drug Avandia. Since 2007, the FDA has added warnings to the Avandia label to alert doctors about potential increased risk of congestive heart failure and heart attack.

“Widespread marketing, with misrepresentations about the safety and efficacy of these drugs, can give doctors a false sense of security,” said Massachusetts Attorney General Martha Coakley, whose office took the lead in a five-state delegation in the settlement negotiations.

The drug company also agreed to resolve civil liability for promoting the drugs Paxil, Wellbutrin, Advair, Lamictal and Zofran for off-label, non-covered uses, the DOJ said. The company’s guilty plea and sentence were approved July 5 in U.S. District Court in Boston.

— Pat Murphy